Tesla delivered the first 30 Model 3 sedans Friday night — kicking off production for the automaker's first mass-market car.
Elon Musk just made Tesla history: the company delivered its first mass-market vehicle, the Model 3.
Musk delivered the first 30 Model 3 sedans at a party on Friday night, kicking off the start of production. The electric automaker will ramp up production to 1,500 sedans a month in September and 20,000 cars in December.
Priced at $35,000, the Model 3 can drive 220 miles on a single charge, accelerate to 60 mph in 5.6 seconds, and support Tesla's Autopilot capabilities, like the ability to drive itself in highway traffic and park on its own. It will come in black, midnight silver, deep blue metallic, silver metallic, pearl white multi-coat, and red multi-coat.
Customers can also pay an extra $9,000 for the Premium Model 3, which has a 310-mile range and can accelerate to 60 mph in 5.1 seconds.
The car was revealed in March 2016 and has since racked up an estimated 500,000 pre-orders. The sedan is now sold out until at least mid-2018. The Model 3 joins Tesla's luxury sedan (the Model S) and SUV (the Model X).
Before Friday's big reveal, customers had yet to see a final version of the Model 3 they reserved with a $1,000 deposit over a year ago.
Customers now have a better idea of what will arrive in their driveway.
Tesla announced a Premium Model 3 with a 310-mile range and top speed of 140 mph, which will roll out to customers who pre-ordered the car following Friday's event.
The base model, which has a 220-mile range and top speed of 130 mph, will start shipping out to customers who pre-ordered the sedan this fall.
For new customers, Tesla is only selling Premium Model 3 sedans with rear-wheel drive at the moment.
The Model 3 will come equipped with a new suite of hardware that supports Tesla's second-generation Autopilot system, Enhanced Autopilot.
Enhanced Autopilot will eventually allow the car to match its speed to traffic conditions, automatically change lanes without driver input, merge on and off highways, and park itself.
Those features cost $5,000 at the time of purchase, but standard safety features like collision avoidance and automatic emergency braking are free. Tesla has yet to push out the software update for Enhanced Autopilot, but plans to do so before the year ends.
Like all Tesla vehicles, the Model 3 will have access to the company's Supercharger stations. The network, which is doubling in size by the end of 2017, restores 170 miles of range in just 30 minutes. That's much faster than Tesla partner stations or traditional wall sockets, but it costs new customers a small fee.
Tesla, however, will face its biggest challenge yet when production kicks into high gear this fall.
The company struggled with initial production for the Model S and Model X, resulting in delivery delays and a voluntary recall for the Model X.
Tesla will have to handle production for its existing vehicles line while contending with the large order for the Model 3. As Business Insider's Matthew DeBord pointed out, Tesla is skipping the production prototyping stage, which validates the assembly line to ensure production goes smoothly. That could spell trouble down the road.
The $35,000 Model 3 is Tesla's first sedan targeted at a consumer audience.
It's a big moment for CEO Elon Musk, who wrote in his 2006 "Master Plan" that his ultimate goal for Tesla was to produce an affordable electric car.
Tesla raised the profile for electric cars in 2008 with the release of its first sports car, the Roadster. Companies like General Motors and Toyota were also investing in electric vehicle technology, but Tesla was the first to show that a battery-powered car could be sexy.
Since then, the company has survived on its luxury vehicle line, but its pivot into the consumer space is noteworthy. The Model 3 shows Tesla's desire to become the final destination for all electric vehicles.
In anticipation for the Model 3, investors have bid up Tesla's stock more than 50% in the last year. The company's market value has rivaled General Motors and Ford.
Potential production issues and the low-profit margins consistent with sedans could create hardships as Tesla aims to scale. Most of Tesla's competitors are planning to release battery-powered SUVs by 2019, a segment with higher demand and better gross margins.
If Tesla executes on the assembly line, the Model 3 could seriously challenge competitors like the Chevy Bolt. At the very least, Musk accomplished a goal that was over 10 years in the making.